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Riyadh real estate market overview 2018 KPMG.com.sa
Table of content 04 06 Macroeconomic Residential overview sector overview 10 14 Retail Office sector overview sector overview 18 22 Hospitality Glossary of terms sector overview 24 26 KPMG Real Contact Estate Services
Macroeconomic
overview
Macroeconomic indicators
Saudi Arabia GDP growth (SAR Bn)
3,263
3,125
2,800 2,836 2,938
2,760
2,511 2,575
2,454 2,419
2011 2012 2013 2014 2015 2016 2017 2018 2019F 2020F
Source: Ministry of Finance, General Authority for Statistics
The economy of Saudi Arabia is characterized by a number of Nevertheless, this has come as a blessing in disguise as the
special features, the most important of which is that it is the government is now embarking upon implementing structural
biggest economy in the Middle East. changes to the economy and moving toward economic
diversification.
Saudi Arabia’s GDP witnessed relatively an exponential growth
between 2011 and 2014. The nominal GDP rose at a CAGR of The announcement of “Vision 2030” and “National
4.1 percent per annum during that period. However, due to the Transformation Program (NTP)” are major restructuring plans
decrease in oil price since late 2014, the country has not been initiated by the government attempting to minimize the Saudi
able to keep up with the same pattern of GDP growth. The economy dependence on oil revenues.
nominal GDP registered a decrease of 13.5 percent in 2015 and The economy has bounced back and the nominal GDP has
1.4 percent in 2016 compared to the previous respective year. witnessed an upsurge of 6.4 percent and 14.1 percent in 2017
Being an important contributor to the country GDP, the real and 2018, respectively, backed by the government’s initiatives to
estate sector has also been impacted by the economic diversify the economy.
slowdown.
4 Riyadh Real Estate Market Overview 2018
Government revenue and expenditure
Government revenue and expenditure (SAR Bn)
(61)
(136) (131)
(238)
(366) (311)
1,039 1,100 612 978 519 830 692 930 895 1,031 975 1,106
2014 2015 2016 2017 2018E 2019 (budget)
Revenue Expenditure Surplus/Deficit
Source: Ministry of Finance
After four years of continuous budget surplus, Saudi Arabia recorded a budget deficit in 2014, due to higher government spending and
sharp decline in global oil prices.
Actual revenues during 2018 amounted to SAR 895 billion, while expenditures reached SAR 1,031 billion, hence causing a deficit of SAR
136 billion. It is lower than the budgeted deficit of SAR 195 billion as total revenues increased by 14.3 percent, while total expenditures
increased by 5.4 percent.
Despite fiscal deficits realized since 2014, the government has been prioritizing investments in non-oil sectors to enhance sustainable
and strong economic growth.
Oil and non-oil revenue (SAR Bn)
38% 37%
1,145 32% 32%
1,035 27%
913
607 662
12%
10% 446 435
8% 329 256 288 313
126 166 199
101 118
2012 2013 2014 2015 2016 2017 2018E 2019F
Oil Revenue Non-Oil Revenue Non-Oil Share (%)
Source: Ministry of Finance
Historically, the economy of Saudi Arabia has been dependent on oil revenues, as the average contribution of the non-oil revenues
constituted only 10 percent of the total revenues between 2012 and 2014. Given the decline in oil prices, the government is
undertaking major initiatives to broaden the revenue base, thus reducing the dependency on oil revenues. The non-oil revenue grew
at a CAGR of 19.1 percent between 2012 and 2018. Furthermore, it is expected to reach SAR 313 billion in 2019, an increase of
8.7 percent over SAR 288 billion in the previous year. A surge in non-oil revenue reflects the government’s ongoing efforts toward
diversifying its income streams and reducing dependency on oil.
Going forward, the non-oil revenues are expected to be primarily driven by higher VAT collections. With an aim to widen the tax net, the
corporate-tax-eligibility threshold is expected to be reduced; the threshold for VAT registration for entities will fall from the current SAR
1.0 million annual revenue to SAR 375,000 per annum. Increase in the non-oil revenue will enable the government to sustain its fiscal
spending and endure the generation of continuous economic growth.
Riyadh Real Estate Market Overview 2018 5
Residential
sector overview
Introduction
Riyadh is the capital and the largest city of Saudi Arabia, with a total population of 6.5 million, whereas the population of Riyadh
province is around 8 million. Its location along the center of the Arabian Peninsula, coupled with increasing economic activities,
makes it a preferred business destination for both Saudis and non-Saudis who live and/or work in the city.
Riyadh has experienced high geographical expansion toward the northern side, due to the availability of developable lands with
modern infrastructure and the proximity to newer and modern developments in the city. Low to moderate residential expansion
is being witnessed toward the northern and eastern sides of the city as a result of the recent initiatives led by the Ministry of
Housing (MoH) to stimulate the sector.
The market is currently characterized with a low homeownership rate as a result of affordability constraints, shortage in supply of
residential units targeting lower and middle-income segments, and large non-Saudi base population staying in rented homes.
Nonetheless, the continuous efforts of the MoH to provide housing solutions and the implementation of various initiatives
(such as its support for new building materials and techniques to increase efficiency and effectiveness) are expected to improve
performance of the real estate sector and its contribution to the economy as a whole, increase the home ownership rate, and
create an attractive environment for both local and international investors while enhancing their confidence.
6 Riyadh Real Estate Market Overview 2018
Supply
With a current supply of about 1.3 million residential units in the city, Riyadh is expected to receive an additional supply of
30,000 residential units by 2019, which comprises a 2.3 percent increase over and above the current stock.
Based on KPMG research, a significant amount of existing supply is being delivered in the form of small to medium-size
projects targeting lower-income and middle-income families. Most of the key upcoming mega development projects such as
the Avenues and ITCC include a residential component targeting middle to upper class income families.
Sakani housing program, one of the MoH initiatives, provided around 300,000 residential products during 2018 including
subsidized loans, developed residential lands and residential units in Riyadh.
Some notable upcoming residential projects in Riyadh are presented in Table 1.1
The majority of the new supply is focused toward the north and the east of the city while the center is becoming saturated
with various developments, and vacant land parcels are becoming more scarce.
Table 1.1: Key upcoming residential projects
No. Project name Units District Developer/Owner
1 Al Dhahia Compound 327 Ar Rimal Al Akaria
2 Ajmakan 640 Al Khozama Sondos Real Estate
3 Rafal Sky Garden 309 AlMohammadiyah Rafal
4 Mirabilia Villas 14 Shams Ar Riyadh Dar Al Arkan
5 Murcia 169 (phase 1) Airport Road MoH
6 East Gate 2,129 Ar Rawdhah Al Mozaini Real Estate Company — MoH
7 Ishraq Living 2,229 Al Aarid Al Tahaluf — MoH
Note: This list is not exhaustive and the shortlisting was based on the likelihood of execution of the projects. Projects beyond the release date of this report
were not included in the shortlisting process.
Riyadh Real Estate Market Overview 2018 7
Performance
Villas
Since 2017, sale prices and rental rates of villas have seen a decline and are expected to continue to decline during 2019. The
trend was first noticed after the implementation of the white land tax, which led to a cautious behavior from investors and end
users, resulting in a considerable drop in activities in the sector.
Based on KPMG research, the northern and central areas of the city such as Al Ghadeer, Al Nada, Al Malga, and Al Wurud
districts command the highest rental rates in Riyadh. The average rental rates of villas vary between SAR 70,000 and SAR
205,000 per annum in the northern, central and western sides, while rentals range between SAR 44,000 and SAR 155,000 per
annum on average in the eastern and southern parts of the city.
For new villa developments, the sale price of villas located in the central part of Riyadh ranged between SAR 4,000 and
SAR 6,500 per sqm. The sale prices of villas located in northern side were observed to be in the range of SAR 2,300 to SAR
5,500 per sqm. Villas in the south reached prices with values between SAR 1,800 and SAR 3,500 per sqm. Sale prices in the
eastern part of Riyadh ranged between SAR 2,000 and SAR 4,500 per sqm. In the western part of Riyadh, villas have been
observed to vary from SAR 2,000 to SAR 4,000 per sqm.
Apartments
Apartments sale and rental rates are under pressure due to
economic slowdown and taxes such as the expat dependent
KPMG’s Residential performance tree
levy. Moreover, the demand for apartments is not as high Average Villa Average Apartment
as villas, however, the popularity of apartments is increasing sale price sale price
relative to previous years in Riyadh as a higher number of new
developments are introducing apartments. The multi-dwelling 6,500 4,000
model allows for more revenue generation potential and can
easily transform to a rental model if the sale absorption is not
fast enough. 5,500 3,500
New apartment developments with modern fixtures and
fittings, in addition to a private basement parking, are still
4,500 3,000
being considered as future investments. However, increasing
utility expenses and the introduction of dependent fees were
the main factors that compelled middle income non-Saudis to
move their families back to their home countries. 3,500 2,500
Unlike villas, existing apartments in eastern and central parts
of the city are more attractive in terms of location due to their 2,500 2,000
proximity to the central business district. The land availability
in the eastern part is relatively higher as compared to central
areas and it mainly houses the mid-income segment. North Riyadh East Riyadh
South Riyadh
For new apartment developments, central areas are still
West Riyadh Central Riyadh
fetching the highest sale price in the city which vary from SAR
3,000 to SAR 4,700 per sqm. The sale prices of apartments
located in northern side were observed to be in the range of Source: KPMG Research and Analysis
SAR 2,000 to SAR 4,300 per sqm. Apartments in the south
achieved prices with values between SAR 1,500 and SAR
4,000 per sqm. Sale prices in eastern part of Riyadh ranged
between SAR 1,500 and SAR 3,600 per sqm. In the western
part of Riyadh, apartments have been observed to vary from
SAR 1,500 to SAR 3,000 per sqm.
Note: Please refer to page 23 for details of Riyadh zones.
8 Riyadh Real Estate Market Overview 2018
Investment opportunities
Despite the current slowdown in the market and subdued performance during the last couple of years, the demand
for housing units is continuously increasing, mainly driven by a large and growing population, coupled with increasing
urbanization and declining household size.
It is critical to note that the demand is mainly increasing for the affordable housing segment, whereas the supply is
predominantly rising in the luxury or high-end segment. Hence, there exists a mismatch among the residential segment, as
the demand is not being catered by offering more affordable housing units. Therefore, the MoH is targeting to bridge this
gap through the development of more affordable housing projects.
The demand for villas remains high due to cultural preferences in Riyadh as seen in the figure below.
High
Medium
Supply
Low
Low Medium High
Demand
Apartments
Villas
Source: KPMG Research and Analysis
Riyadh Real Estate Market Overview 2018 9
Retail
sector overview
Introduction
According to KPMG research, Riyadh’s retail sector performance is leading compared
with other real estate sectors. After the establishment of the Real Estate Investment
Traded Funds (REITs) and other governmental initiatives, new opportunities are available
in the market, therefore a lot of investors and developers have announced new projects
along with the expansion of existing projects.
Consumer preferences have changed with cinemas returning to Saudi and the rise of
e-commerce. Retail operators are expected to implement new methods that combine
shopping with entertainment to attract more footfall to their space and distinguish their
retail space from other offerings in the market.
The new address for fine dining lovers is Prince Turki Ibn Abdul Aziz Al Awwal Road, since
a number of small to medium national and international cuisines and coffee shops are
opening and some existing food and beverage retailers are willing to expand.
Figure 3.1: Types of retail supply
Community mall/center
38%
Super regional mall
37%
Regional mall
25%
10 Riyadh Real Estate Market Overview 2018Riyadh Real Estate Market Overview 2018 11
Supply Figure 3.2: Retail supply (sqm of GLA)
In 2018, we witnessed the opening of Riyadh Park, a super
regional mall located at the intersection of Northern Ring Road
2,100,000 2,100,000
and Al-Khair Street. Along with this, some community malls and
strip retail centers have been witnessed in distributed areas in
Riyadh.
On the other hand, some major ongoing retail developments
are expected to be completed in the coming years as shown in
Figure 3.1.
Riyadh’s total supply of retail space in 2018 reached over 2.1
million sqm of GLA after the addition of new retail space. 2019
is expected to witness an additional supply of 320,000 sqm
3,20,000
of GLA and by considering the upcoming retail space, we can
2018 2019
expect that by 2019, these major retail projects will contribute
around 2.4 million sqm of GLA as shown in Figure 3.2.
Existing Upcoming
Moreover, Riyadh’s total retail space is expected to reach up to
2.7 million sqm by 2021.
Source: KPMG Research and Analysis
Performance
In the second half of 2018, the Ministry of Labor and Social
Development (MLSD) decreased the Saudization percentage of KPMG’s Retail performance tree
12 specific subsectors from 100 percent to 70 percent which
Rental Rate SAR/Sqm Occupancy
will impact the retail performance in the short term.
Based on KPMG research and analysis, the market continues to
be strong despite the effect it experienced from the introduction 3,300 100%
of the VAT in January 2018. On the other hand, lower consumer
purchasing power led to a decrease in rental rates by 5 percent
and 10 percent across different areas of the city. 3,000 90%
Regional and super regional malls have higher rental rates than
community malls because of higher footfall. Community malls 2,700 80%
rental rates range between SAR 1,000 to SAR 3,700 per sqm.
By the end of 2018, average vacancy rates increased to 15
percent across all mall categories, and we expect that the rents
2,400 70%
will remain under pressure until the end of 2019.
However, we assume that the growth of the entertainment
sector in Riyadh will have a positive impact on the retail sector 2,100 60%
that will strengthen the market.
Prince Turki Ibn Abdul Aziz Al Awwal Road, Northern Ring Road,
King Abdul Aziz Road and Abi Bakr As Siddique Road are the Super Regional Regional Community
new destinations for the upcoming retail developments and
shopping centers. Source: KPMG Research and Analysis
12 Riyadh Real Estate Market Overview 2018Investment opportunities
High
Although a high amount of retail space is expected
to enter the market, there is still demand for retail
space in Riyadh, particularly in newer residential
areas toward the northern side of the city. This
demand stems from the increasing number of
international brands willing to open stores in the
Medium
Supply
city since with the opening up of the economy and
rising awareness of international brands within the
general public, there is higher acceptance of these
international brands in the market.
According to KPMG research and analysis, there
is a potential for the development of community
centers which can cater to the demand generated
by surrounding neighborhoods. Furthermore, the
Low
development of super regional malls can also be
considered for future investments but it should be
equipped with modern leisure and entertainment
facilities.
It is noteworthy that the size of the opportunity Low Medium High
is small because of forthcoming supply in
the pipeline, which can lead the market to an Demand
oversupply situation. In addition, current economic
and market conditions should be considered before Super regional mall
introducing any future development.
Due to the expansion of the city toward the
northern and eastern sides, these locations are Regional mall
ideal for development of retail space primarily due
to lack of quality retail offerings within the area.
With new residential communities being set up, Community mall/center
we expect the new population in the area to feed
into the demand for retail space, increasing the
success of any retail development in the area. Source: KPMG Research and Analysis
Riyadh Real Estate Market Overview 2018 13Office
sector overview
Introduction
Riyadh is the most popular urban city and business hub in Saudi Arabia, holding 27
percent of the labor force and over 2 million sqm of office stock. Based on KPMG
research, the following factors are expected to support the office sector in the
coming years:
—— One of Vision 2030’s main pillars is empowerment of the private sector and
enhancing its contribution to the economy.
—— Saudi nationals working in the private sector coupled with influx of the
expatriate workforce as Saudization is currently targeting B2C and not B2B
employees who, in turn, occupy the various types of office spaces in Riyadh.
—— Increasing participation of women in the workforce especially after lifting the
ban on issuing driving licenses for women in the country.
Labor force distribution by province in 2018
38%
21% 20% 22%
Others
Eastern Province
Makkah
Riyadh
Source: General Authority for Statistics
14 Riyadh Real Estate Market Overview 2018Riyadh Real Estate Market Overview 2018 15
Supply Historically, the growth of Grade A and B office spaces has been concentrated primarily on Olaya Street and King Fahad Road, but as a result of the lack of parking lots and increased traffic congestion, tenants are moving to other higher quality business hubs located across different parts of the city. 2019 is projected to witness a completion of 190,000 sqm of GLA to reach an office stock of 4.5 million sqm by the end of the year. Upcoming developments are scattered along different main roads predominantly in the northern side of the city such as the Riyadh Front development that includes smart offices. However, the most important upcoming office project in Riyadh is King Abdullah Financial District (KAFD) which has the potential to entirely transform the existing office market. KAFD is expected to open by October 2020. However, post 2021, it is expected that the overall office supply would increase at a relatively lower rate than the historical rate owing to the oversupply conditions and the resulting decline in occupancies. 16 Riyadh Real Estate Market Overview 2018
KPMG’s Office performance tree
Performance
Rental Rate SAR/Sqm Occupancy
Riyadh Grade A office market average occupancy
rate reached 82 percent in 2018. Nevertheless, 2,000 100%
since 2017, the market performance has seen a
declining trend in both rental and occupancy rates
due to the increase in supply while the demand 1,600 90%
has remained stable.
As soon as King Abdullah Financial District and 1,200 80%
Riyadh Front projects are completed, the current
Grade A office segment will become oversupplied
and unattractive to investors and developers.
800 70%
In addition, we are expecting further decline
in both rentals and demand for office space
especially for Grade B office segment after 400 60%
allowing foreign investors to invest in the country.
As new supply enters the Riyadh market, an
increase in vacancy rates is expected to be seen. Grade A Grade B
Source: KPMG Research and Analysis
Investment opportunities
B
High
Supply has surpassed demand and led the
market to be oversupplied. This trend is expected
A
to continue due to bulk of upcoming supply,
which is expected to put further pressure on the
rents and occupancies.
The supply of Grade A office space in iconic
Medium
developments such as KAFD and ITCC will
take a considerable time to occupy the market,
Supply
especially in current conditions where the
international prices of crude oil are under
pressure which limits the affordability of many
businesses.
The market opportunity for Grade B
Low
developments is more than that of Grade A,
where KPMG expects a number of tenants to
relocate to Grade B offices to save costs, given
the current economic conditions.
Low Medium High
Given the expected future situation in the sector,
KPMG does not recommend further investment Demand
as no development opportunities are identified A
Grade A
for the office sector in Riyadh.
Grade B B
Source: KPMG Research and Analysis
Riyadh Real Estate Market Overview 2018 17Hospitality
sector overview
Introduction
Historically, corporate sector and business tourism were the demand drivers
in Riyadh’s hospitality market. After the introduction of Vision 2030, several
projects related to leisure and tourism have been revealed to stimulate the
economy.
Qiddiya Entertainment City, the first of its kind in the Kingdom, is expected
to launch Phase One in 2022. It is located in southwest region of Riyadh with
an area of 334 square kilometers, a mega entertainment, cultural, and sports
project. Besides, it will soon become the world’s largest entertainment city by
2030 exceeding Walt Disney in Florida.
The hospitality sector was included in applying a municipal fee which was
introduced in February 2018 in Saudi Arabia, with a specific classification
percentage depending on its segment as shown in Figure 5.1
Figure 5.1
Four and five star hotels
and serviced apartments
municipal fee
Three star hotels and
serviced apartments
municipal fee
2.5% 5%
18 Riyadh Real Estate Market Overview 2018Riyadh Real Estate Market Overview 2018 19
Supply
Despite delays in several projects, 2018 witnessed a supply of 1,700 keys in three, four and five star hotels. These
additions have brought the total supply to reach 13,500 keys in the Riyadh hotel market, and it is expected to
reach 16,000 by the end of 2019 with a 20 percent increase in total supply. The future supply in the hotel market is
expected to reach an increase of 52 percent in 2023 compared to the current supply.
Some of the prominent hotels that started operation in 2018 include the Marriott Hotel and Marriott Executive
Apartments DQ, Radisson Blu Hotel & Residence DQ, and Hilton Riyadh King Saud University Residence. A new
Marriot hotel was launched in 2018 as an airport hotel in Riyadh.
Performance KPMG’s Hotel performance tree
ADR SAR/Night Occupancy
Limited improvement in performance is expected in 2019
compared to 2018, as the market has witnessed a moderate
decline in both the occupancy rates and ADR while supply 1,500 100%
continues to increase.
The substantial dependence on business travel could contribute
1,200 90%
to softer performance, along with delivery of new hotel keys
among the current economic slowdown.
The market observed an increase of about 6 percent in 900 80%
occupancy rate to reach a total of 53 percent in 2018, while
ADR dropped by 10 percent, and RevPAR declined by 8 percent.
The hospitality sector is dependent on the Vision 2030 goal of 600 70%
increasing household spending on cultural and entertainment
activities across the Kingdom, to increase the demand level
300 60%
from 2.9 percent to 6 percent to support local leisure travel.
Since a wide range of investment opportunities is offered in
leisure and entertainment, the recovery of the real estate 5 Star 3 Star
4 Star
market in Riyadh is expected to be led by the hospitality and
leisure sectors.
Source: KPMG Research and Analysis
20 Riyadh Real Estate Market Overview 2018Investment opportunities
Although four and five star hotels enjoy higher ADRs, the high amount of upcoming hotels and different categories of keys within
these hotels will put a downward pressure on the performance of this asset class.
Based on KPMG research, there is a shortage of three star hotels which have a high demand. All of the upcoming supply focused on
four and five star hotels leaves a gap in the market for branded budget hotels.
With the increasing number of business travelers and budget constraints from companies, and given the current economic conditions,
the demand for three star hotels is expected to continue growing.
Further demand stems from people who cannot afford to stay in costly four and five star hotels and choose to stay in unbranded
hotels or service apartments due to lack of quality offering in this asset class.
Given the current economic conditions and shortage of supply for three star hotels, investments in this category can be considered.
High
Three star
Medium
Supply
Four star
Five star
Low
Low Medium High
Demand
Source: KPMG Research and Analysis
Riyadh Real Estate Market Overview 2018 21Glossary
of terms
Bn Billion
CAGR Compounded annual growth rate
GASTAT General Authority for Statistics
EIU Economist Intelligence Unit
MOI Ministry of Interior
GCC Gulf Cooperation Countries
GDP Gross domestic product
GLA Gross leasable area
NTP National Transformation Program
Mn p.a. Million per annum
SAR Saudi Arabian riyal
Sqm/Sq.m. Square meter
USD/US$ United State dollar
YoY Year on year
F&B Food and beverage
KSA Kingdom of Saudi Arabia
ME Middle East
MENA Middle East and North Africa
Sq. Km. Square kilometer
22 Riyadh Real Estate Market Overview 2018North Riyadh
East Riyadh
North of Riyadh
West Riyadh
Central Riyadh
South Riyadh
Riyadh Real Estate Market Overview 2018 23KPMG Real Estate
Services
KPMG is a global network of professional firms
providing audit, tax and advisory services. We have
more than 173,965 outstanding professionals working
Strategy Advisory Services
together to deliver value in 155 countries worldwide.
We work closely with our clients, helping them to
Strategy and business plans: The team is involved in
mitigate risks and grasp opportunities.
KPMG in the Kingdom of Saudi Arabia is established
01 developing corporate strategies and business plans for
real estate clients in the start-up, growth, transformation,
through its member firm KPMG Al Fozan & Partners. and mature stages. Strategy development includes
The firm has been operated in the Kingdom of setting goals/objectives, determining actions to achieve
Saudi Arabia since 1992. It also operates through a the goals, and helping clients mobilize resources funding
national leadership with dedicated regional teams, to execute the actions.
which enable our network of professional talent,
Financial modeling: KPMG’s experienced Financial
our technologies and our products and solutions to
quickly come together to meet clients’ needs. The 02 Modelling team develops custom models for real estate
clients to be used for their strategic, financial, and day-to-
firm has grown to be one of the largest professional
day requirements. These models are delivered to clients
services firms in the Kingdom with more than 900
with user manuals and training sessions to help ensure
working professionals and three offices in Riyadh,
proper usage of the model pried.
Jeddah, and Al Khobar.
KPMG’s Real Estate team is led by seasoned
professionals with over 100 years of combined real
estate experience. The team provides different types
of real estate advisory services across the Kingdom
of Saudi Arabia through our three offices in Riyadh,
Jeddah, and Al Khobar. The team is also supported by
KPMG’s global network of member firms. KPMG’s
Real Estate team provides the following services for
real estate developers and investors.
24 Riyadh Real Estate Market Overview 2018Development Advisory Transaction and Financial
Services Advisory Services
Highest and best use studies: Our professionals Real estate sales: The Real Estate team is actively
01 advise clients on the best development option that
is financially feasible and appropriately supported
01 involved in bringing together real estate developers
with real estate investors. The scope involves
by the market to generate the highest returns. developing an Information Pack, which includes
KPMG provides research backed development background, market, technical, and financial
options, scenario analysis, sensitivity analysis, and information about the company. KPMG’s Real Estate
key financial returns/indicators. team can help clients with the sales process from
inception to signature of a binding agreement.
Market research and analysis: KPMG’s Real Estate
02 team assesses the market in order to advise Bank financing: The Real Estate team is also actively
on the most attractive sectors of the real estate
market. The assessment is based on drivers like
02 involved in preparing Information Packs used for bank
financing. KPMG’s Real Estate team has a long track
demand and supply and performance indicators record of success in helping clients secure bank
like lease rates, sale prices, occupancies, ADRs financing with our Information Packs.
etc. The market analysis is based on both primary PPP procurement and tendering: KPMG’s Real
and secondary research conducted by our
dedicated research team. 03 Estate team can lead the procurement and tendering
processes of PPP projects on behalf of clients. The
Financial feasibility studies: Combined with the team has led several multibillion-dollar PPP projects
03 market study, KPMG assesses the expected
financial returns of specific real estate projects
in the region and has developed the relative PPP
experience which can help ensure favorable financial
based on the parameters of the project and the closure of projects.
market indicators. The feasibility study includes
market and financial analysis sections. KPMG’s
financial feasibility studies are frequently used by
a number of banks as bankable documents; these
can also be used by developers/investors to raise
debt from banks.
Valuation services: KPMG’s Real Estate team
04 provides valuation services where the entity value
is derived by using different valuation methods
such as Comparables, Multiples, Asset Sale, and
DCF valuation methodologies.
Riyadh Real Estate Market Overview 2018 25Contacts
Firas Hassan
Head of Real Estate
Tel: +966 (11) 8748500
Fax: +966 (11) 8748600
Mobile: +966 561 85 5055
firashassan@kpmg.com
www.kpmg.com.sa
Shadi Al Haddad Saad Ghandour Firas Wehbe
Associate Director Associate Director Manager
salhaddad@kpmg.com sghandour@kpmg.com fwehbe@kpmg.com
Muhammad Sameed
Wassim Tarhini Hussain Saadat Ali
Manager Manager Assistant Manager
wtarhini@kpmg.com muhammadshussain@kpmg.com saadatali@kpmg.com
Mohammed
Ihsan Mousli Alia Baroom Al-Sanea
Assistant Manager Senior Associate Senior Associate
imousli@kpmg.com aliabaroom@kpmg.com malsanea@kpmg.com
Raid Bugshan Ahmed Aljared Nora Al-Helal
Senior Analyst Assistant Analyst Assistant Analyst
raidbugshan@kpmg.com aaljared@kpmg.com nalhelal@kpmg.com
26 Riyadh Real Estate Market Overview 2018Notes
kpmg.com.sa © 2019 KPMG Al Fozan & Partners Certified Public Accountants, a registered company in the Kingdom of Saudi Arabia, and a non-partner member firm of the KPMG network of independent firms affiliated with KPMG International Cooperative, a Swiss entity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International. This report has been prepared by Real Estate Advisory Team of KPMG Al Fozan & Partners, Certified Public Accountants. The information contained herein is obtained from the sources deemed to be reliable and is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.
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